Tuesday, September 12, 2017

Ontario Liberals plan cannabis monopoly

September 11, 2017 - "Ontario’s plan to sell recreational marijuana through dozens of government-controlled outlets 'is grossly insufficient' in meeting consumer demand and will 'encourage' the growth of the black market, experts say.

"Finance Minister Charles Sousa, Health Minister Eric Hoskins and Attorney General Yasir Naqvi revealed the details of the rollout Friday, which will see 40 LCBO-run marijuana stores — separate from its liquor vending locations — in place across the province by next July, with that number rising to 80 in 2019 and 150 in 2020. A government website dedicated to online sales is in the works for 2018....

"The Liberal government said the plan will allow the LCBO to sell marijuana at competitive prices, snuff out the black market and boost provincial coffers through tax revenues.... However, experts are skeptical that the distribution model will have its intended effects.

"Anindya Sen, a professor of economics at the University of Waterloo, told Yahoo Canada Finance that he is 'disappointed' the province didn’t utilize the existing marijuana dispensaries and that the number of planned LCBO-run stores won’t be enough to meet consumer demand.

'My concern is that the objective of making (dispensaries) illegal is to stamp out the illicit market, but this will do anything but stamp out the illicit market, in fact, it will encourage the growth of an illicit market because there’s simply not enough stores'.... He said that it will also take time and 'a lot of money' to set up these new government-controlled outlets.

"Rosalie Wyonch, a policy analyst at the C.D. Howe Institute, echoed Sen’s concerns, saying that there are at least 100 marijuana dispensaries and delivery services currently operating in Toronto alone, and the Liberal government’s plan misses the opportunity to take advantage of that foothold in the market.... Wyonch said the dispensaries could’ve been licensed and regulated by the government, rather than being turned into black market competition.

"'Instead, we’ve got these hundreds of business ... owners and all their employees potentially facing penalties if they chose to continue to operate,' she said. 'The levying of these penalities will require significant justice and police resources, so to me it’s just a missed opportunity that we could’ve avoided ... altogether by bringing those retail storefronts into a competitive, legal market.'

"Wyonch added that since the these government-controlled stores will have no legal competition, there’s essentially no incentive to constrain their operating costs, which could, in turn, inflate prices and make it harder to compete with the black market.'"

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